The S&P 500 also plummeted as speculation about Powell’s future gathered pace but recovered after Trump appeared to rule out dismissing the Fed chief, while the yield gap between five- and 30-year Treasuries stretched to a level not seen since 2021.
Trump and his administration have ramped up their rhetoric in recent weeks against Powell, appointed as Fed chair during Trump’s first presidency in 2018.
On Wednesday, Trump said the Fed’s decision to keep interest rates elevated instead of cutting in recent months was harming the mortgage market.
“It does hurt people wanting to get a mortgage, people want to buy a house… He’s a terrible Fed chair,” Trump said.
The Fed has kept rates on hold this year, partly because of the tariff war launched by Trump at the beginning of April, as it waits to see whether upward pressure on inflation could emerge.